Singapore, June 1: Tata Communications Ltd (TCL) is proposing to raise $123 million in syndicated loans next month to help meet its cellular project cost of $246 million.

TCL is a joint venture company between Tata Industries and Bell Canada International to provide cellular services in Andhra PradeshOf the total debt, to be fully underwritten by Bank of America (BoA) and Toronto Dominion (TD), $70 million will be in foreign currency. The balance - $53 million - will be rupee loans.

The dollar loans are to raised from international commercial banks, and the rupee component from IDBI ($30 million) and Indian commercial banks ($23 million).

Tata Industries' senior manager (finance), G Madhavan told The Financial Express, that an application for raising the loans had already been submitted to the ministry of finance. Approval was expected by the end of next month.

``BoA and TD will be holding discussions with banks for sub-underwriting during the initial weeks of June and general syndication will commence by the third or fourth week of the month,'' Madhavan said.

Though the licence agreement for the project was signed in December 1995, the company's GSM mobile services and associated value-added services were launched in Hyderabad a year later.

``The market share of TCL is now about 70 per cent. We expect the company to have a subscriber base of over 25,000 by March 1998 and over 250,000 by the end of 8 years,'' added the senior manager.

The recent ruling by the Telecom Regulatory Authority of India to restore the earlier lower tariff on cellular services has buoyed the market, said Madhavan.The amount spent on the project so far is about $90 million.

Bell Canada, which is the international investment arm of the BCE group, has an asset base of Canadian $2 billion while that of Tata Industries is about $200 million.

The Tata-Bell consortium had submitted bids for five states -- Andhra Pradesh, Maharashtra, Karnataka, Gujarat and Punjab - but succeeded in securing only the Andhra licence.

``We intend to develop TCL into a strong and dominant market player in Andhra Pradesh,'' said Madhavan.

``We would like it to evolve into an organisation which is perceived as being the leading cellular operator in the country while meeting its obligations to customers, employees, stake holders and business partners.''

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.